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The initiative is a response to the problems posed by local NGO dependency on international donor support and the current insufficiency of local public and private philanthropic resources in CEE to meet their growing needs. As both the number and size of NGOs in the CEE region rise, and NGOs begin to professionalise, expand and diversify their activities, there is an increasingly urgent need to address the very basic question of how to financially sustain their valuable efforts. The question of how to achieve "sustainable" NGO financing has always confounded NGO professionals, fundraisers, donors and policy analysts. It represents perhaps one of the greatest obstacles for the "nonprofit" sector. NGOs are eternally faced with the limitations of public and private philanthropy and the limitations of both their institutional form and capacity to gain access to adequate resources. In CEE, for example, a large majority (roughly 75 percent) of the nearly 2,000 environmental NGOs responding to a survey conducted by the REC in 1996, already characterized their financial situation as "very poor," "poor," or "unstable." The financing of NGOs in CEE is a particularly critical issue as some foreign governments and private funding institutions have begun to reduce - or altogether eliminate - their foreign assistance to the region. Most predominantly in the "more developed" CEE countries (Czech Republic, Hungary, Slovakia and Slovenia), future commitments of resources for NGOs have been waning. Whether out of lack of institutional capacity, lack of awareness or simple disdain for market-based solutions, NGOs in the region have typically overlooked opportunities to take advantage of their own "entrepreneurial" potential to generate resources. Meanwhile, however, the continued privatization and development of domestic markets in many CEE countries indicate concrete growth and substantive potential. Governments are stabilizing, market-oriented institutions are emerging and local business activity is rapidly increasing and gaining international exposure. Numerous NGOs, have already begun to employ creative and potentially lucrative "enterprises" to capitalize on these opportunities.
The launching of the NGO Planning for Sustainability Projects is an attempt to better understand the preconditions and opportunities for fostering NGO self-financing strategies in the CEE region. The SNFP Team does not promote the commercialization
of NGOs. Rather, it sees fundamental flaws with the current paradigm
where NGOs compete for a limited pie of existing resources, which
often leads to dependency on unstable, project-based funding.
Questions of management, access to credit, potential fallout
and competition with for-profit small-businesses, public accountability
and potential abuses are all issues deserving critical examination
before promoting or advancing such an approach. |
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